The Canada Growth Fund formed a partnership with Strathcona Resources to build CCS infrastructure on Strathcona’s steam-assisted gravity drainage oil sands facilities across Saskatchewan and Alberta. The partnership was announced in July 2024.

Through the SAGD CCS Partnership, Strathcona will seek to capture and permanently store up to two million tons of CO2 annually, with CGF and Strathcona each contributing up to CAD 1bn in project funding.

Stikeman Elliott and Sproule International Limited acted as advisors to Canada Growth Fund. Blake, Cassels & Graydon served as legal counsel to Strathcona.

Under the terms of the SAGD CCS Partnership, CGF and Strathcona will each fund 50% of the capital costs to build CCS infrastructure on Strathcona’s oil sands facilities. CGF will initially commit $500m in project funding with the option to upsize its commitment to $1bn.

Strathcona will build, own and operate all CCS projects and receive all investment tax credits. CGF will earn a targeted return over time with the annual cash flows generated by each CCS project based on actual captured volumes, actual operating costs, and a fixed carbon price guaranteed by Strathcona. Each CCS project’s fixed price per tonne will be set at the time of FID.

Strathcona’s oil sands facilities in Lloydminster and Cold Lake are located near suitable CO2 storage reservoirs, allowing for CO2 to be injected directly on-site.

In 2024, the Government of Saskatchewan granted Strathcona subsurface CO2 injection rights.

The SAGD CCS Partnership will allow Strathcona to begin its final detailed engineering work with a targeted FID date in mid-2025 for its first commercial CCS project which is expected to be in Saskatchewan. Strathcona is in dialogue with the province of Alberta regarding an approval for dedicated sequestration pore space beneath its Cold Lake properties.